The M7 takes some of the load off the iPhone's main chip, the A7. The M7 controls the motion processing bits of the phone like the accelerometer, which tracks the phone moving up and down, and the gyroscope which tracks its moving in space, and the compass.

Apple said the M7 will be good for fitness apps because it can work in the background taking up less battery power.

It's also helpful for other stuff, according to Apple's website: "M7 knows when you're walking, running, or even driving. For example, Maps switches from driving to walking turn-by-turn navigation if, say, you park and continue on foot. Since M7 can tell when you're in a moving vehicle, iPhone 5s won't ask you to join Wi-Fi networks you pass by. "

His sources tell him Apple is testing a feature that would help iPhone users find their car in a parking lot. The M7 can tell when an iPhone is traveling in a car, and when it's stopped. As a result, Apple is tinkering with having the phone mark where the car gets parked. So, when a user leaves a store and needs to hunt for their car the iPhone can tell them where the car is.

Beyond that, Apple is working on an update for its Maps that will include transit directions, and the M7 can be used to map out indoor locations. These updates should come with the next iOS update.